Ways to scale beyond the connectivity conundrum for CSPs in IoT value delivery

IDC’s recent report Scaling Beyond Connectivity Essential for the Communications Service Provider Role in Internet of Things Value Delivery explains the importance of scaling IoT projects for Asia/Pacific communication service providers (CSPs) to move up the value chain. This is even more important as the ongoing pandemic has put a focus on IT spending where it matters more — cost containment, customer experience, and new avenues for revenue generation. With this, ongoing IoT projects (or already deployed ones) pose a significant opportunity for CSPs to re-engage and reposition their ‘connectivity-plus‘ offerings.

“Moving beyond the connectivity-only offerings in the IoT space requires a mapping of assets, their associated outcomes, and customer touchpoints. The connectivity-plus offerings also need close collaboration amongst platform providers, related business goals, and CSP solutions,” says Yash Jethani, Research Manager, Telecom & IoT at IDC Asia/Pacific.

With different application enablement platforms and connectivity management platforms, customers in Asia/Pacific* look for solutions which are stitched from end-to-end and enables easier management with lesser customer touchpoints. The public cloud providers only add fuel to the competition with their edge-based solutions combining AI/ML, therefore operators need to prove:

• ROI for efficiency, productivity, and customer experience that intrinsically link to costs of IoT deployment.
• Value of underutilized data processing capacity from the quick increase and decrease in customer usage.
• The importance of data privacy and built-in security with open APIs.

Based on IDC’s Worldwide IoT Spending Guide, 2020, connectivity related spending remains 11% of the total IoT spending in Asia/Pacific*, while hardware and services spend represent 73% of the spend. Most of the connectivity related spend is catered by CSPs via LPWAN, cellular, or other connectivity technologies. This clearly depicts opportunities for CSPs in leveraging IoT for freight monitoring, manufacturing operations, remote health, and smart grid – the top use cases in Asia/Pacific* – and permeate the related hardware and services growth.

Other highlights from the report include addressing several key questions for CSPs:

• What are some case examples in the collaboration space where operators leverage system integrators to scale beyond the connectivity conundrum?
• How do system integrators such as L&T technology Services, Tech Mahindra, and IBM help operators in the IoT deployment value creation?
• What frameworks can operators rely on to target IoT deployments?
• As operators plan their data-driven transformation, what are some of the add-on capabilities they can look at?

“It is not just about the operational KPIs addressing the ‘what’ in the transformation phase, but also about ‘where’ in the value chain an operator intends to play and how in the overall value chain and operator intends to grow beyond connectivity-only offerings,” Jethani ends.

IDC has been tracking the development of leading regional and global telecommunications service providers in the market through its core research on 5G, CAPEX market forecasts, IoT Access and Traffic, IoT Spending, Managed SD-WAN, Telecom Services, as well as business sentiment surveys around carrier transformation, next-generation software-defined networks and collaboration. IDC